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On June 19, 2021, a company purchases a call option for $ 625.89, which gives the company the right to buy 100 shares of XYZ
On June 19, 2021, a company purchases a call option for $ 625.89, which gives the company the right to buy 100 shares of XYZ Inc. for $23.8 each until December 1, 2021. XYZ Inc. shares are currently trading for $ 23.8. At June 30, 2020, the option is trading at $824.23 and the shares at $ 25.94 each. At December 31, 2021, the options expire with no value. Calculate the intrinsic value of the option at June 30, 2021. Do not use commas in yous numeric answer Answer: On January 1, 2018, Vancouver Company granted stock options for 30,000 of its no par value common shares to key employees, at an option price of $ 25. On that date, the market price of the common shares was $ 22. The Black-Scholes option pricing model determined total compensation expense to be $ 330000. The options are exercisable beginning January 1, 2021, provided the key employees are still employed by Vancouver at the time the options are exercised. The options expire on January 1, 2022. On January 2, 2021, when the market price of the shares was $ 29 per share, all 30,000 options were exercised. Calculate the amount of compensation expense Vancouver Company should have recorded for calendar year 2020. Do not use a comma in your answer and round to the nearest dollar. 0
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